Corporate Cast Sets Scene For Melodrama

February 19, 1989|By TOM PETERS

A few weeks ago, I spoke to a sizable gathering of chief executives from Fortune 500 (and service-sector equivalent) firms. One commented afterward that, although he had thought I had done a dandy job, ``some other`` attendee he had been chatting with ``could have done with less melodrama.``

I welcome feedback, good or bad. But I challenged, in absentia, his friend. Melodrama, eh? Here`s a sample of subject matter that I had presented.

-- I will best remember 1988 as the year Sears put its 110-story tower up for sale. The firm is having a devil of a time with the likes of Wal-Mart, which will likely surpass Sears in retail sales this year. Wal-Mart`s rapid decision-making allows the relative newcomer from Bentonville, Ark., to make weekly changes that take its established competitor about three months to complete.

-- General Motors made a profit in 1988 on cars, for a change. Nonetheless, it has lost a quarter of its market share since 1980, despite seven years of protectionist quotas on imported Japanese cars.

-- Nothing is more important than the emerging use of the computer as a personal appliance. Yet in the world of PCs, IBM managed to shuck more than a third of its market share in the last two years -- and companies such as Apple, Compaq and Dell are gaining strength.

-- Kodak has been shellacked in photo finishing, where mom-and-pop mini- labs have increased their portion of the $5 billion U.S. market from 5 percent to 38 percent in the last five years. Kodak also has been battered in cameras, by Minolta, Cannon and Fuji. Yet a Kodak spokesman responded to a recent announcement by Sony of a new filmless camera: ``We don`t see this as being a threat for the foreseeable future.

So much for the melodrama at venerable Sears, GM, IBM and Kodak. But I barely have scratched the surface.

-- Our share of the worldwide high-tech market has dropped 22 percent in the last 36 months.

-- Honda`s chief executive said about a year ago that he is in hot pursuit of no less than a 300 percent productivity increase; and he is well on the way to delivering it. Honda already develops cars about twice as fast as its U.S. counterparts.

-- In 1987, Matsushita Electric Industrial, topped the charts in Japan with 79.6 suggestions per worker. Overall, the average Japanese employee submits 24 suggestions a year compared with 0.14 by U.S. workers.

-- A 1988 Gallup survey for the American Society for Quality Control revealed that consumers consider U.S. product quality to be slightly worse than it was judged to be in a similar 1985 survey. And J.D. Power, the respected auto industry researchers, just reported that eight Asian, seven European and one U.S. make received higher than average, word-of-mouth recommendations from buyers; lower than average marks went to one Asian, four European and 11 U.S. product lines.

-- Another recent Gallup poll analyzed ``institutions in which Americans have confidence.`` At the apex were religion, the military and the Supreme Court. Next came banks, public schools, newspapers, Congress and television. Organized labor pulled down the next to last slot. The booby prize went to big business.

Melodramatic? Or not? Add all this up, and the reasonable person would conclude that something cataclysmic is going on in the U.S. and world economy.

At least one chief executive, Drew Lewis of Union Pacific, gets the message. He`s slashed layer after layer of useless superstructure. Moreover, The Wall Street Journal reports that he came to work one day last summer in shorts and sneakers -- to demonstrate graphically the shake-up of old ways in the stodgy outfit. Hats off to Lewis, a realist who obviously comprehends the value of well-timed melodrama.